Airbnb released its initial public offering prospectus on Monday, cementing the short-term rentals company's plans to debut by the end of the year.
The company reported a net profit of $219 million on revenues of $1.34 billion despite the coronavirus pandemic's pressure on the travel and leisure industry. However, those revenues were down roughly 19% when compared to last year, as Airbnb's international business was harmed more by pandemic restrictions than operations in the United States.
Like most companies, Airbnb had a rough 2020. When the coronavirus outbreak first began to sweep across Europe and the U.S., the company became strapped for cash as customers rushed to cancel their bookings in a panic as the travel industry was brought to a standstill.
To combat the pandemic's stress on the industry, the company was forced to lay off a quarter of its workforce, suspend marketing activities and raise $2 billion in emergency funding from investors at a valuation of $18 billion back in May.
"In early 2020, as Covid-19 disrupted travel across the world, Airbnb's business declined significantly," the company wrote in the filing. "But within two months, our business model started to rebound even with limited international travel, demonstrating its resilience. People wanted to get out of their homes and yearned to travel, but they did not want to go far or to be in crowded hotel lobbies. Domestic travel quickly rebounded on Airbnb around the world as millions of guest took trips closer to home. Stays of longer than a few days started increase as work-from-home become work-from-any-home...the lines between travel and living are blurring, and the global pandemic has accelerated the ability to live anywhere."
Airbnb has not turned an annual profit since its launch in 2008, and warned that 2020 will not be its first profitable year despite its pandemic comeback. The company noted that it expects bookings to decline and cancellations to rise again in the fourth quarter as Europe enters a second coronavirus lockdown and the U.S. continues to see staggering infection rates. Coronavirus uncertainty is still a major factor in the company's profitability in the future as listings on the platform decrease, particularly from hosts that rely on Airbnb to pay mortgages.
Moving forward, the company seeks to establish itself as a community of hosts and guests rather than another booking service for vacation rentals. Airbnb highlighted in its filing that it will set up 9.2 million shares of non-voting stock aside in an endowment fund for hosts, as well as establishing a $250 million coronavirus relief fund for hosts to help provide some relief from booking cancellations.
"Out guests are not transactions--they are engaged, contributing members of out community," the company wrote. "Once they become a part of Airbnb, guests actively participate in our community, return regularly to our platform to book again, and recommend Airbnb to others who then join themselves. This demand encourages new hots to join, which in turn attracts even more guests."
"It is a virtuous cycle--guest attract hosts, and hosts attract guests," the company noted on its business model.
Airbnb plans to list its stock on the Nasdaq under the ticker "ABNB" sometime in early December. The company wrote in its filing that it is seeking up to $1 billion in its debut, but that could be a placeholder that is expected to change to a possibly higher amount.